The big news out of John Menzies' (MNZS) half-year results was the acquisition of two businesses for its aviation division. Ground handler Skystar, which operates eight airports in Australia and New Zealand, was acquired for £7.7m, while Colombian ground and cargo handler Desacol was snapped up for £6.4m, marking John Menzies' first foray into South America.
The aviation division was also the real engine of growth, offsetting weaker performance from the newspaper distribution arm. Operating profit there rose 10 per cent to £15.5m and revenue grew 6 per cent to £361m, boosted by 9 per cent volume growth in ground handling and strong profit performances from the cargo handling and forwarding operations. A net 35 contracts were won in the period, providing an extra £10m of annual revenue and 55 contracts were renewed, securing an additional £43.2m of revenue.
In the distribution business, poor magazine sales and title closures offset a rise in newspaper revenue, leaving divisional sales down 1.8 per cent to £637m and operating profit down 13 per cent to £11.8m. However, around £3.2m of costs have been cut and John Menzies is looking at alternative profit streams by leveraging its established distribution network for other purposes, such as delivering retail goods.
Broker Numis Securities expects full-year pre-tax profit of £56m and EPS of 69.1p, up from £54.5m and 68.5p, in 2012.
| JOHN MENZIES (MNZS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 739p | MARKET VALUE: | £449m | |
| TOUCH: | 736p-741p | 12-MONTH HIGH: | 815p | LOW: 568p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 151p* | NET DEBT: | 119% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 941 | 16.4 | 19.0 | 7.35 |
| 2013 | 952 | 18.4 | 22.0 | 7.70 |
| % change | +1 | +12 | +16 | +5 |
Ex-div: 23 Oct Payment: 22 Nov *Includes intangible assets of £123m, or 202p a share | ||||
